FINANCIAL EDUCATION

SENSIBLE INVESTING – STOCK MARKET HISTORY

Robin Powell of Regis Media produces various resources to help people understand how investments work and how finding the right financial planner is key to a successful investment experience. These are not videos that we have created at Solomon’s – they are his and I think that they are a fantastic resource. They are fairly short and cut down to form a short series. Many of them were made a few years ago, so the data is not up to date, but frankly that doesn’t matter – the principles are bang on now and they will be in ten, twenty or thirty years’ time. If you would kindly “like” and share these it would be a nice thank you to Robin. He also does a very helpful blog here.

STOCK MARKET HISTORY PART 1

Human beings have always invested for the future. From the caveman storing food for his family for the winter, to the 21st century office worker providing for his or her retirement, investors have shared the same goals and emotions, the same hopes and fears. They’ve made the same mistakes, enjoyed the same highs and suffered the same lows. So what can investors today learn from this almost bottomless well of human experience?

STOCK MARKET HISTORY: PART 2

Part 2 of an eight-part series on the lessons to learn from stock market history explains why investors need to be realistic about the sort of returns they can expect. We all know investors who’ve made an absolute killing. And we’re often reading in the media how, if only we buy this or that asset or investment product, we could make one as well. There are even financial advisers who give the impression that investing is a one-way bet. But the first lesson to learn from market history is to be realistic.

STOCK MARKET HISTORY: PART 3

The next key lesson to learn from market history is to stay calm. All investing involves a degree of risk. And market volatility is inevitable. It goes with the territory. But more than that, there’s a direct link between risk and expected return. And that’s not a theory, but a mathematical fact, as confirmed in the Capital Asset Pricing Model, which earned its authors the Nobel Prize in Economics.

STOCK MARKET HISTORY: PART 4

So, we’ve explained why market history shows we need to be realistic as investors – and also to keep calm when others are letting their emotions get the better of them. Now for a lesson that few very people – least of all the so-called experts – have managed to learn. And it’s this… Don’t try to time the market.

STOCK MARKET HISTORY: PART 5

So far we’ve discussed the need to be realistic, to stay calm and to forget trying to time the market. The next lesson is to keep it simple. The rules of sensible investing are, in fact, relatively simple. Unfortunately, the investment industry seems to prefer complexity. Twice in recent history, that complexity has sent markets tumbling. But of course the lessons of market history often go unlearned and, just 20 years later came another crash – largely caused by investments that were so complex that not even the professionals understood them. Yet still there are some who just don’t get it. Even after what happened in 1987, and again in the Credit Crunch, the industry continues to peddle complex investments – and investors continue to buy them. So, what’s answer?

STOCK MARKET HISTORY: PART 6

It’s been called the golden rule – the one free lunch in investing. And it’s a lesson that screams from every page of market history. Diversify. These are the average returns that different asset classes have produced since 1900. But they are just average returns. Over the long term, equities deliver a much higher return than any other type of asset. But often, in any one year, shares produce negative returns…

STOCK MARKET HISTORY: PART 7

Part 7 of an eight-part series on the lessons to learn from stock market history explains why, despite the constant temptation to trade, the best thing that investors can do once they’ve built a portfolio that matches their attitude to risk is… nothing. Actually, that’s not strictly true, because it is wise to rebalance your portfolio either once or twice a year.

STOCK MARKET HISTORY: PART 8

In the final part of this video series, we recap the six key lessons that investors can learn from studying stock market history. There are better times to invest in equities than others, but – crucially – we only know whether now is a good time or not with the benefit of hindsight. The good news is that, even if you invest just as markets are about to tumble – as they did in 1929, for example – you will be rewarded if you hold tight and resist the temptation to keep tinkering with your portfolio.

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Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk 
Call – 020 8542 8084

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GET IN TOUCH

Solomon’s Independent Financial Advisers
The Old Bakery, 2D Edna Road, Raynes Park, London, SW20 8BT

Email – info@solomonsifa.co.uk    Call – 020 8542 8084

WHAT WE’RE ALL ABOUT

If you would like a no-nonsense one page document explaining what financial planning is all about please enter your email here.

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